Government makes cosmetic changes to schemes for coir industry

Sachin Manawaria | The Dollar Business

Farmers bring coconut fibre in bulk on boat for selling in Kollam, Kerala. The labour-intensive coir industry has now spread to 22 states in India.

  In a review meeting with Kalraj Mishra, Minister of MSME, the Coir Board has re-named its two schemes for the coir industry. The “Rejuvenation, Modernisation and Technology Upgradation (REMOT) and Coir Plan (General) scheme have been changed to Coir Udyanmi Yojana (CUY) and Coir Vikas Yojana (CVY) respectively. The Ministry said that the changes will help stakeholders understand the schemes better. The Coir Udyanmi Yojana (CUY) is a credit link subsidy scheme aiming to integrate and develop coir units, and provides 40% as government subsidy, 55% as bank loan and 5% as beneficiary contribution for setting up coir units. There is no need for collateral security guarantee and marketing support assistance is provided under the scheme. In comparison, the Coir Vikas Yojana (CVY) is about skill upgradation and quality improvement, apart from assistance for setting up and expansion of coir units. The scheme also provides export market promotion in the form of assistance to participate in international fares and exhibitions, said the ministry. The 150 year-old traditional coir industry in India has now spread from Kerala to over 22 states including the North East. The coir industry is an export-oriented sector and the scope for value-addition is very high, reaching up to 140 times in the case of products like coir composite boards, and rubberised coir mattresses.

] Source – DGCI&S. P - Provisional figures

India’s exports of coir and coir products have seen significant growth during the last fiscal year while the dependence on imports for coir products have reduced drastically. During FY2013-14, coir exports grew to around Rs.1,396.64 crore, up around 31% from Rs.1,069.47 crore in FY2012-13. In the same time, imports have decreased to Rs.58 crore from Rs.88 crore. Exports in the current year April – Oct 2014-15 stand at Rs.864.51 crore, while imports stand at Rs.18.98 crore.  The government has taken some steps to increase the production and exports of coir and coir products. Coir and coir products are incentivised at around 2 - 5% under the Focus Product Scheme (FPS), and at around 3 - 4% under the Focus Market Scheme (FMS). There is also an exemption of excise duty on handmade carpets and textile floor covering of coir and coir products. However, there is a need to further encourage coir industry to help compete with Southeast Asian countries and to match the value-addition done in China which accounted for around 36% of all coir exports by India in terms of quantity in FY2013-14, and over 98% of coir fibre exports by India in the year. The Coir Board has urged the government to provide incentives under the Foreign Trade Policy (FTP) to make Indian Coir globally competitive and help in the modernisation of the sector. The Board has also asked the government to begin eco-labelling of coir products and to declare Pollachi in Tamil Nadu as a town of export excellence in Coir and Coconut products. This will help the coir industry in Pollachi to avail assistance under various schemes including Assistance to States for Infrastructure Development of Exports (ASIDE), said the Coir Board.  

 This article was published on January 3, 2015.